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March 27, 2023

Oil companies to pay overtax as of 2013

According to Economy Minister Daniel Chitoiu, royalties on natural resources will be brought to European levels.

After the Competition Council sanctioned six oil companies, at the beginning of this year, with fines worth almost RON 900 M (more than EUR 200 M) for entering anti-competition agreements, authorities have more bad news in store for oil market players.In a meeting – held yesterday – of economic counselors belonging to the external representation network of the Ministry of Economy, Commerce and Business Environment (MECMA), Daniel Chitoiu announced that the Government is drafting a law that will instate an overtax on the exceptional incomes earned by oil companies, which might be approved before the end of the year and will possibly be enforced starting 2013. According to the minister, authorities also plan to bring royalties on natural resources to the European level. On May 7, right after he was appointed as minister of the Ponta Cabinet, Chitoiu said that the Government might enforce a tax on the exceptional incomes of oil companies and change the level of royalties, which are too small now. Premier Victor Ponta recently stated on TV that, in the near future, the government will modify the system of royalties, before the end of the current session of the Parliament.Royalties on oil and gas, which now range between 3.5 pc and 13 pc of the output, are in effect from 2004 until December 2014. They were set through the privatisation contract of Petrom with Austrian group OMV. The state budget receives approximately RON 1 bln (EUR 225 M) each year from mining and oil royalties. The main oil and gas companies active in Romania are OMV Petrom, Rompetrol (controlled by KazMunaiGaz of Kazahstan), Lukoil (Russia), MOL (Hungary), Eni (Italy) and Romgaz Medias.

Result of Hidroelectrica contracts’ renegotiation, tomorrow

The minister of Economy will announce Friday the result of negotiations between Hidroelectrica and the beneficiaries of preferential energy contracts. The result is eagerly expected, as the head of the IMF mission to Romania, Jeffrey Franks said last week that the “smart guys” which have preferential contracts with Hidroelectrica might pay fines or completely refund the money they earned this way, if a probe conducted by the European Commission rules that these contracts were state aid. Some of these “smart guys” agreed to renegotiate the contracts, but others refuse to accept the new conditions.

Politically appointed managers to be replaced

The minister of Economy, Daniel Chitoiu announced that he will replace all the general managers of state companies “that stole and were appointed on political criteria.” The new nominations will not be political, he added. However, Chitoiu has not replaced any company manager so far. The minister gave the example of Transelectrica, where there is a 4-month blockage caused by a battle “between two PDL clans.” Because of this blockage, the Board of Transelectrica did not meet for the last four months, he added.

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